St. Jude to Buy AGA Medical in $1.3B Deal
St. Jude Medical, Inc., has agreed to acquire AGA Medical Holdings, Inc, in a deal valued at about $1.3 billion, the companies said Monday.
Both companies' boards of directors approved an agreement under which Little Canada-based St. Jude will acquire all of the outstanding shares of AGA Medical for $20.80 per share in half-cash, half-stock transaction. The deal includes St. Jude's assumption of about $225 million of AGA's outstanding debt and is expected to close by the end of the year.
Plymouth-based AGA Medical-which reported $198.7 million in 2009 sales-manufactures a line of devices used to treat structural heart defects and vascular abnormalities through minimally invasive transcatheter treatments.
The companies said in a news release that the combination of their product lines will create “a clear leader in the structural heart market.” Specifically, they said that the acquisition will make St. Jude the only company with devices and offerings across all major structural heart categories-including structural heart defects, left atrial appendage occlusion, transcatheter aortic valve implantation, and percutaneous mitral valve repair.
AGA Medical went public in 2009 and was the only Minnesota company to complete an initial public offering that year. Its revenue has grown at a compounded annual rate of 19 percent between 2005 and 2009, and St. Jude said that it expects AGA Medical to grow its revenue “in the low double-digits for 2011, not including the benefits of any possible future product approvals or successful trial outcomes.”
AGA Medical was started by Kurt Amplatz, a University of Minnesota professor of radiology for more than 40 years. The company's Amplatzer devices, which bear his name, are marketed and sold in 112 countries, and more than 450,000 have been sold worldwide to date. The septal occluder has spared more than 100,000 people, both adults and children, from the trauma of open-heart surgery.
Following the acquisition, which is pending regulatory approval and expected to close by the end of the year, AGA Medical will become part of St. Jude's cardiovascular division. AGA Medical President and CEO John Barr has agreed to join St. Jude and will report to cardiovascular division President Frank Callaghan. St. Jude plans to continue AGA Medical's operations from its current Plymouth location.
St. Jude will use cash on hand to fund that portion of the consideration. The company said that except for one-time expenses that it expects to record in the fourth quarter, the acquisition will not impact its 2010 outlook for consolidated earnings per share.
St. Jude's board has authorized a stock repurchase of up to $600 million of St. Jude's common stock in order to offset the shares issued in the deal to acquire AGA Medical.
St. Jude is among Minnesota's 20-largest public companies based on its 2008 revenue, which totaled $4.4 billion. The company reported revenue of $4.7 billion in 2009.